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Zimbabwe Cash Crisis Persists Despite Higher Withdrawal Limit

October 27, 2009 3:22 PM

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Zimbabwe Cash Crisis Persists Despite Higher Withdrawal Limit

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Days after Zimbabwe's central bank increased daily withdrawal limits,
the lines outside Zimbabwe's banks are still as long as ever. As Tendai
Maphosa reports from Harare this is seriously affecting productivity
for those with jobs.

Starting this week, Zimbabweans can
withdraw, on a daily basis, 20,000 Zimbabwean dollars (equal to about
$5) from their bank accounts up from the previous daily limit of 1,000
Zimbabwean dollars. But this has failed to reduce the lines that
sometimes spill off the sidewalk onto the streets as people wait to
withdraw their money. Most of them still say it is not enough to meet
their daily needs in the country with the world's highest inflation
rate.

In addition to the frustration this causes, president of
the Zimbabwe Congress of Trade Unions (ZCTU) Lovemore Matombo tells VOA
it is disrupting productivity in the work place.

"Some people
have suggested that they can only work for eight hours for the whole
week suggesting that four-fifths of production is lost per week," he
said.

Matombo adds that this worsens the economic situation
since the country's manufacturing sector has virtually collapsed.
Unemployment in Zimbabwe is estimated at more than 80 percent.

The
ZCTU president says his organization had planned to demonstrate on
October 1 against the then daily withdrawal limit of 1,000 Zimbabwean
dollars. He says the increases only put the planned action on hold.

"What
we are observing especially in Harare is characteristic of what's
happening elsewhere around the country but we need to get information
from our staff members from our trade unions representing the various
provinces as to what is happening," said Matombo. "Once that is done we
are going to march to the reserve bank in the case of Harare and to
other reserve bank agencies in the case of the various provinces around
the country."

Only weeks ago the central bank revalued the
currency by loping off ten zeros. This was so people would not have to
carry piles of money for the most basic transactions. But the zeros are
coming back - on the day bank withdrawals were increased, Z$10,000 and
Z$20,000 notes were introduced.

An economist speaking on condition
of anonymity told VOA that the note shortage could be partly due to a
shortage of printing paper. This is because a German firm, which used
to supply Zimbabwe, stopped doing so citing the government's poor human
rights record. He however added that an abundance of notes would simply
drive Zimbabwe's hyperinflation. The solution, he says is to get the
country's economy working again.

Critics of President Robert
Mugabe blame his government's mismanagement for Zimbabwe's economic
woes. He in turn says Western imposed sanctions are to blame.

Meanwhile,
strike action over pay by its pilots has forced the national airline,
Air Zimbabwe, to ground its fleet for 48 hours starting Friday.